Good Companies Are Storytellers. Great Companies Are Storydoers; The story is about a larger ambition to make the world or people’s lives better

Good Companies Are Storytellers. Great Companies Are Storydoers

by Ty Montague  |   1:00 PM July 16, 2013

storydoing-6-thumb-200x399-4480 storydoing-5-thumb-200x312-4473

Discussions about story and storytelling are pretty fashionable in marketing circles. I have ambivalent feelings about this. On the one hand, as a lifelong advocate for the power of story in business, I find this very encouraging. For all companies, having a story and knowing that story are crucial steps to achieving success. On the other hand, I’m worried that too many marketers think that telling their story through advertising is enough. It’s not. In fact, those that think this way do so at their own risk because there is a new kind of company on the rise that uses story in a more powerful way — and they run more efficient and profitable businesses as a result. In my new book, True Story: How to Combine Story and Action to Transform Your Business, I call these new companies storydoing companies because they advance their narrative through action, not communication. Storydoing companies — Red Bull, TOMS shoes, Warby Parker, and Tory Burch, for example — emphasize the creation of compelling and useful experiences — new products, new services, and new tools that advance their narrative by lighting up the medium of people. What I mean by this is that when people encounter a storydoing company they often want to tell all their friends about it. Storydoing companies create fierce loyalty and evangelism in their customers. Their stories are told primarily via word of mouth, and are amplified by social media tools. So how do you know a storydoing company when you see one? These are the primary characteristics:

  1. They have a story
  2. The story is about a larger ambition to make the world or people’s lives better
  3. The story is understood and cared about by senior leadership outside of marketing
  4. That story is being used to drive tangible action throughout the company: product development, HR policies, compensation, etc.
  5. These actions add back up to a cohesive whole
  6. Customers and partners are motivated to engage with the story and are actively using it to advance their own stories

Recently, my partners and I at co:collective initiated a project to determine whether there is hard statistical evidence that storydoing companies are achieving superior results. We also wanted to create a tool that allows CEOs and other senior leaders to apply these criteria to an analysis of their own company.

One of the difficulties we encountered is many of the best examples of storydoing are privately-held companies, so the data on their financial performance is not publicly available.

So we chose 42 publicly-traded companies. This list spans seven business categories: retail, entertainment, food and beverage, electronic payments, consumer electronics, airlines, and IT services/products. Since storytelling companies outnumber storydoing companies, in each of the seven categories we chose five storytelling companies and one storydoing company based on the criteria we described above. The storydoing companies are Target, Walt Disney, Starbucks, American Express, Apple, Jet Blue, and IBM. More detail on the full methodology can be found here.

The early results we are seeing are quite compelling. As we expected, storydoing companies are generating a substantially greater number of mentions in social media:
Those mentions are also more positive:

This ability to light up the medium of people in a positive way allows storydoing companies to spend substantially less money on paid media per dollar of revenue:

And they wring more value out of that spend in the number of mentions in social media per dollar spent:

As a result, storydoing companies are growing faster than their storytelling counterparts in revenue: …and share price:

One interesting side note is that it seems like the market hasn’t recognized the structural advantage that storydoing companies have over their storytelling counterparts. Their superior results are not yet reflected in P/E ratios:

This is only a start to our research, and we can only imagine that adding some of the privately owned companies for which we’re missing financial data would yield even better results than those reported here. Whether that turns out to be true or not, time will tell. But based on the evidence we have to date, our conclusion is that storydoing companies are on to something very compelling. CEOs who seek to deliver better financial results to their shareholders would do well to take heed.

In the spirit of collaboration and improvement we would like to invite anyone to help advance this thinking, by challenging our results to date, making suggestions to improve the methodology, or adding to the data set with data of their own. We think that over time the data set itself can become a valuable public source of inspiration and evidence for agents of change to begin to apply the principles of storydoing inside their own companies.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

One Response to Good Companies Are Storytellers. Great Companies Are Storydoers; The story is about a larger ambition to make the world or people’s lives better

  1. Pingback: Telling and Creating Your Story | The Principal of Change

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: